The cost of minimum wage

Farmers, businesses feel burn of 19 cent increase

COLUMBIA BASIN— Many business and farming operations around the region are feeling the heat from the rising minimum wage in Washington state, which went up again at the beginning of the year.

The minimum wage increased in January to $7.35 an hour, up from $7.16 in 2004.

"It drives up the value (we) have to pay for labor," said John Bates, president of the Grant County Farm Bureau, noting that increasing minimum wage is a big deal for those people that have to hire people. Bates added that the Farm Bureau thinks the market should dictate the minimum wage rather than the government.

Gary Christensen, who farms mint, wheat, corn and alfalfa on the Royal Slope, said he has done away with hiring minimum wage employees.

"I used to hire students, used to hire kids [aged] 14, 16," he said.

That's all changed because of the labor laws and the cost of paying someone who doesn't have the experience. Christensen said he doesn't hire any students or youth anymore, and employs mostly full-time people now.

"The whole payroll schedule moves up, faster than minimum wage," he explained. "There's a real differential between minimum wage employees and those who work full time and have some skills."

When asked about the outlook for his farm, Christensen responded that it was good question, considering the cost of labor, fertilizer and fuel. He's going to see how long he can keep farming, he said, but he refuses to go so long that it jeopardizes his equities.

Christensen added that he thinks the minimum wage is a good thing, but he doesn't think the state's automatic increases are beneficial.

"I really think there are a lot of jobs that could be done if the minimum wage did not accelerate as fast as the state has it," he said. "With the situation of high minimum wage, a lot of people could have work that employers do not offer the jobs and, consequently, there's higher unemployment. The wages cannot be met, and consequently people suffer for lack of work."

Leonard Seltz, owner of Taco Time, is another person who said his business has been greatly impacted by the increase in wages. The five more experienced workers on his staff don't make as much money as they should, he said, because he has to "distribute it to people who come and go like the wind."

Like Christensen, Seltz said he no longer hires youth.

"Youth aren't worth that kind of wage," he said, adding that he gives a math test to potential employees, with sample questions asking what 10 percent is of 1.75, how many quarts are in one gallon and how many ounces are in one pound. "Out of 10 people that come in here, eight of them will fail it. They don't know what 10 percent of a dollar is. These are simple things that if you bring somebody in to an entry level job and pay them $7.50 an hour, you assume that they would know that."

Seltz also doesn't pay anybody minimum wage, but he said higher wages, increased taxes and the like change everything about operating a business when put all together.

Taco Time also no longer hires seniors or people who do limited jobs, because they tend to not be able to switch hats very quickly.

"We can't afford to have somebody just come out and do dining room or dishes any more," Seltz said. "They've got to be able to do that, plus alternate jobs."

In addition, the Taco Time dining room now closes earlier and draws more business from its drive-through window.

"You don't mandate a one shoe fits all," Seltz said. "We've taken a wage and said the same wage fits for somebody in King County as it does for somebody in Soap Lake."

"It's been difficult to hire minors with no experience at $7.35 an hour," said Lisa Hansen, owner of Quiznos. "I have to get that worth of work, [which is] difficult to do with a teenager with no experience."

Quiznos uses other programs, such as Workstudy, Skill Source, Community Jobs and hiring welfare-to-work recipients, Hansen said.

"It's important for us to try to ensure that we can give people a chance, and then we just take it from there," she said.

Hansen added that it is more difficult to raise the pay rate of an experienced and reliable employee.

"We originally anticipated that maybe we would have a wider gap in pay range," she said. "Now they're all pretty much the same. It's difficult to give them a wage increase when the least experienced person has to be paid $7.35 an hour."